Nigerians Abandon 30m Bank Accounts

Nigerians Abandon 30m Bank Accounts

The total number of inactive bank accounts in Nigeria stand at 30.26 million despite efforts by banks to retain old customers and attract new ones. The accounts, activated by commercial banks for new holders but later abandoned to dormancy by the customers now constitute 32.42 per cent of the total 94.388 million activated bank accounts in the country. Consequently, only 64.128 million accounts that represent 68.7 per cent of the total activated accounts domiciled in commercial banks are functional. According to the latest industry statistics obtained by Daily Trust from the Nigerian Inter-Bank Settlement System (NIBSS) Plc over the weekend, the growing wave of new, active and dormant accounts across savings and currents account types in the country has been progressively steady. Giving the year-to-date (YTD) analysis of the latest report up till October this year, NIBSS indicated that a total of 4.13 million accounts have become dormant within the period, jacking up dormant account base to the current figure from 26.042 million it stood at the end Q4, 2015. NIBSS further stated that from a figure of 85.018 million accounts in December 2105, total account base in the country has grown by 11.02 per cent as 9.37 million new accounts were activated within the period. In its breakdown, 30.063 million, 2.896 million and 2.365 million new accounts came on board in Q1, Q2 and Q3 2016 respectively, while in October, the figure maintained the upward momentum by 1.12 per cent as 1.046 million new accounts were recorded in the month alone. Meanwhile, further analysis data revealed savings accounts as constituting the largest chunk of the total activated bank accounts as it stood at 66.255 million while current accounts are just 25.58 million. Experts have also warned that Nigerians, who make use of dormant bank accounts, should not throw caution to the wind as the account might generate debt. A customer, who preferred not to be named, recounted her ordeal with one of Nigeria’s leading banks, saying “My dormant bank account generated a debt which kept growing overtime, so, one must be careful.” According to Investopedia, a dormant account has had no activity for a long period of time, other than posting interest and a statute of limitations usually does not apply to it, so funds can be claimed by the owner or beneficiary at any time. However, it will be recalled that until a new dormant account management policy was released by the Central Bank of Nigeria (CBN) late in 2015, commercial banks in Nigeria have always converted customers’ money in dormant accounts from liabilities to income of the banks. While the apex bank put an end to this standard by also directing banks to reverse such conversion of customers’ money made five years before the 2015 policy which was in favour of account holders, analysts said this must have also contributed to the growing rate of dormant accounts.